Once financial sector deflation caught up with the rest of the market, even the soaring fertilizer sector took a beating in the latter half of 2008; however, the stocks bottomed in November of 2008, before the broader markets in March of 2009. Since that time, the major players largely traded sideways as the S&P continued to pave its way higher. Only recently have the fertilizers gained momentum again, and this time it’s as a value, rather than growth story, although growth remains a major catalyst.

The world population is growing at 1.17% per year. The simple underlying logic for owning agriculture companies is that a growing world population will require more food to sustain itself over time. At a 1.17% growth rate starting with a total population of 6.79 billion (according to the 2009 United Nations estimate), we will add nearly 80 million people to the planet this year.

Even with significant growth in total arable land around the world, we cannot keep up with the birth rate. According to the Food and Agriculture Organization in 1961 the world had 0.42 hectares of arable land per person. Yet, by 2002 this number had fallen to 0.23 hectares per person. In order to continue producing enough food for our growing population, we have increased the productivity of our lands. Fertilizer is one essential component in maximizing our productivity.

Why the major interest in the sector now? Well this map provides a great visual for that story:

With a burgeoning global population, particularly in Asia and the sub-content, farmers demand ever more quantity from their fixed amount of arable land. Global leaders in GDP growth, like China and India, have a mere 80 and 146 hectacres of arable land per thousand people. This is well below the levels of other developed economies. These countries have to simultaneously combat a rapidly growing population and an already undersized level of food production per capita. In order to do so, they must extract increasing volumes of food from the same amount of land, and in doing so fertilizer is an essential ingredient.

To learn more about this developing story, check out Your Cheat Sheet to Investing in Agriculture, our in depth report on the story behind the growing interest in fertilizer stocks, and breakdowns of industry leaders PotashCorp (NYSE: POT), Mosaic (NYSE: MOS) and Agrium (NYSE: AGU).